2024-06-06 09:40:00 ET
Summary
- The BOC forecasted GDP growth to be 2.8% annualized for the first quarter, and the latest read came in at 1.7%, with the year-over-year growth rate at a paltry .5% annualized.
- Central bank rate cuts help lower variable-rate debt costs but will not provide the urgent debt relief many seek.
- Government bond prices have been rallying as we expected, which will help lower new fixed loan rates on offer.
Yesterday, the Bank of Canada ((BOC)) blinked on inflation fears and responded to weak growth and rising unemployment with the first rate cut in four years and the first since the epic tightening cycle began 27 months ago in March 2022. Markets are pricing in another 75 bps of BOC rate cuts by year-end. Canada is the first G7 country to ease; others typically follow suit....
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Eyes Wide Open As Bank of Canada Blinks